The Labor Department reports the consumer price index climbed by a seasonally adjusted 0.2% last month. Gasoline prices rebounded in February. Higher costs for food, housing and new cars also contributed to the increase. Still, there’s been zero overall inflation in the last 12 months, mainly because of the big drop in gas prices. If food and energy are excluded, so-called core consumer inflation has risen at a 1.7% rate over the past 12 months.

In February energy prices rose 1%. Gasoline price are still down almost 33% in the past year. Food prices moved up 0.2% last month, bringing the increase over the past 12 months to 3%. Shelter costs also rose 3% in the past year. The cost of medical care fell in February for the first time since 1975, although overall health-care costs were unchanged.

Now, the reason the CPI number is important is because the Federal Reserve last week shifted from being patient about raising interest rates to being data dependent about hiking rates, and the data they are focusing on is inflation and jobs. Although the Fed uses a different index as its preferred price gauge, the central bank views 2% inflation as healthier for the economy. The key to the inflation data is that much of the disinflation is the result of lower oil prices, and the Fed thinks this is temporary; prices will move higher, probably later in the year.

San Francisco Fed president John Williams says the Fed should hike rates mid-year. Speaking in Sydney, Williams suggested economic conditions in the US were “downright good.” He added he believed, “We will be starting to raise interest rates this year and we will be moving them gradually over the next couple of years to more normal levels.” Meanwhile, St. Louis Federal Reserve President James Bullard speaking in London today said he is concerned about the mismatch between the markets and the central bank’s expectations for the first interest-rate increase, warning it could end with a “violent” reaction in the financial market. And by violent reaction he means something like the taper tantrum of 2013.

Sales of new single family homes rose 7.8% in February to a seasonally adjusted annual rate of 539,000 units, the highest level since February 2008. The regional results were unusual, to say the least; and likely influenced by bad winter weather. Sales last month soared 152.9 percent in the Northeast, but fell 12.9 percent in the Midwest. Sales in the South jumped 10.1 Sales fell 6.0 percent in the West.

Meanwhile, the S&P/Case-Shiller report on existing home sales finds prices were up 4.5% in December compared to a year ago. The report said average home prices in the 10 and 20 cities covered are back to levels last seen in autumn 2004, but are still down between 16% and 17% from their peaks set in mid-2006. All 20 cities on the index saw prices rise in December, with the fastest pace of increase reported in Denver and the slowest in Las Vegas. All cities also saw prices accelerate year-over-year, led by a 9.3 percent price jump in San Francisco and an 8.4 percent increase in Miami.

US troops will remain in Afghanistan. Today president Obama granted Afghanistan’s request to slow the drawdown of troops; that means 9,800 troops will stay through the end of the year; then troop size will be re-assessed for 2016; then the plan is to be out by 2017. Under a previous plan U.S. forces were to have been cut to about half of the current level of just under 10,000 by the end of 2015. But U.S. officials said improved relations with Afghan leaders contributed to a revision of the plan. The thinking is that the new government in Kabul needs to get a little stronger. And there is also the prospect of peace, which sounds farfetched, but Pakistan is putting pressure on the Taliban to negotiate with the government in Kabul or else lose the havens they enjoy on the Pakistan side of the border. Of course policy can reverse quickly in that corner of the world, but after 13 years, it isn’t just America that is war weary.

Broadband internet service providers hate net neutrality; they fought it tooth and nail, but more than 4 million people wrote to the FCC in favor of neutrality and the FCC ruled to regulate ISPs like a utility. No surprise then that the broadband providers are now challenging net neutrality in the courts. The first challenge was just filed by USTelecom, a trade group; more legal challenges will follow, but the FCC hasn’t even published the new rules in the Federal Register.

On the USTelecom website they claim that broadband is critical for the US economy; they compare the investment in broadband to the great government investments in the interstate highway system and the Apollo moon shot; and they don’t seem to deny that 75% of the nation consumers have only one choice for high speed internet service – essentially a monopoly. So, they think of their industry as a utility; they just want to be the utility that gets to self-police, decide their own rules, and decide their own punishment if they break their own rules. The big argument is that they have spent a lot of money on broadband; and they think the service is pretty good. But it isn’t.

Downloading a high-definition movie takes about 7 seconds in Seoul, Hong Kong, Tokyo, Zurich, Bucharest and Paris, and people pay as little as $30 a month for that connection. In Los Angeles, New York and Washington, downloading the same movie takes 1.4 minutes for people with the fastest Internet available, and they pay $300 a month for the privilege. The divide is not just with the fastest plans. At nearly every speed, Internet access costs more in the United States than in Europe. American Internet users are also much more likely than those in other countries to pay an additional fee, about $100 a year in many cities, to rent a modem that costs less than $100 in a store. And if you would like to download that movie in 7 seconds at one-tenth the cost, forget about it. The cable companies have the technology, but they have no reason to upgrade their systems because they have no competition. It’s not like most people have an option of a different carrier. Let the lawsuits begin.

The UN has issued a report claiming that the world could suffer a 40 percent shortfall in water in just 15 years unless countries dramatically change their use of the resource.

Many underground water reserves are already running low, while rainfall patterns are predicted to become more erratic with climate change. As the world’s population grows to an expected 9 billion by 2050, more groundwater will be needed for farming, industry and personal consumption. The report predicts global water demand will increase 55 percent by 2050, while reserves dwindle. If current usage trends don’t change, the world will have only 60 percent of the water it needs in 2030.

Water shortages could lead to problems in so many ways: crops could fail, ecosystems could break down, industries could collapse, disease and poverty could worsen, and violent conflicts over access to water could become more frequent. The report calls on policymakers and communities to rethink water policies, urging more conservation, recycling of wastewater, and finding ways to make water-intensive sectors more efficient and less polluting. One of the more controversial ideas is to raise the price for water. Factors driving up demand for water include increased meat consumption, larger homes, transportation, and basically most of the perks we associate with a middle-class life.

Population growth and increased urbanization also contribute to the problem. Water demand tends to grow at double the rate of population growth. The global population is expected to grow to 9.1 billion people by 2050, up from the current 7.2 billion. More people living in cities also put strain on water supplies. The report estimates that 6.3 billion people, or about 69% of the world’s population, will be living in urban areas by 2050, up from the current 50%. Currently, about 748 million people worldwide have poor access to clean drinking water.

And the problem is right in our own backyard, or more specifically next door. California is in its fourth drought. Despite occasional rainfall this winter, water-supply conditions in California have grown more dire. Reservoirs are woefully low, and the snowpack in the Sierra and groundwater levels are at or near historic lows. The senior water scientist at NASA’s Jet Propulsion Laboratory in Pasadena wrote in the Los Angeles Times this month that the state has only about one year of water left in its reservoirs. One year. And groundwater is being pumped so rapidly for agriculture in the Central Valley that the land in some areas is literally sinking at the rate of a foot or more per year. This summer many fields will be left fallow.

Last week, California Governor Jerry Brown approved a $1 billion emergency drought package, but more than $700 million of that money will actually go toward flood control, food assistance and the protection of wildlife habitat. The State Water Resources Control Board will tighten water restrictions, which will limit lawn watering to twice a week, and restaurants should not serve water unless a customer asks for it and hotels should give guests the option to decline fresh towels and sheets every day. Even the water board’s chairwoman described the restrictions as “quite modest.” But modest policy could give way to desperate policy if the drought continues. And even if the drought were to end tomorrow, there will be extended droughts in California’s and the entire Southwest’s future. As it stands now, water policy won’t help much.

It is often said that necessity is the mother of innovation. For the past 20 years, some of the brightest minds in the world have converged on California, many have tried to answer the question of how to get more clicks for an online advertisement. I think their focus is going to change quickly.